Turkey Inflation August 2019

Turkey: Inflation slows in August

September 3, 2019

Consumer prices rose 0.86% in August compared to the previous month, down from July’s 1.36% increase. The slowdown was driven by a modest decrease in transportation costs after increasing substantially in July.

Inflation slowed to 15.0% in August from 16.6% in July. Core inflation, which excludes volatile price items such as energy and food, moderated to 13.6% in August from 16.2% in July. Annual average inflation, meanwhile, slowed to 19.6% from 19.9%.

Business conditions in Turkey’s manufacturing sector continued to deteriorate in May, albeit at a softer pace compared to the prior month, with the Istanbul Chamber of Industry Turkey Purchasing Managers’ Index (PMI) rising to 40.9 from 33.4 in April.

The Central Bank once again cut the one-week repo rate at its 21 May meeting, this time by 50 basis points to bring the rate down to 8.25%—the lowest it has been in two years, since before the country’s 2018 currency crisis.

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